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Analytical procedures issued in the planning stage of an audit, generally?
directs attention to potential risk areas | |
All of the above | |
indicates important aspects of business | |
helps to determine the nature, timing and extent of other audit procedures |
An auditor should not accept a loan on favourable commercial terms from an audit client because of the threat to his or her independence.
Advocacy threat | |
Self-review threat | |
Self-interest threat | |
Familiarity threat |
According to ISA 500, the strength of audit evidence is determined by which two qualities?
Appropriateness & competence | |
Reliability & extensiveness | |
Sufficiency & appropriateness | |
Objectivity & independence |
According to ISA 315, which of the following is NOT an element of the control environment?
Human resource policies and practices | |
Information processing | |
Commitment to competence | |
Participation of management |
According to ISA 315, which of the following is NOT a control activity?
Segregation of duties | |
Organizational structure | |
Physical controls | |
Performance reviews |
A statutory auditor has a right of access at all times to___________?
Books, accounts and documents of the company | |
Books and accounts of a company | |
Books, accounts and vouchers of the company | |
Notices and documents of the company |
___________ are checks that are issued by the business but not yet presented to bank
Outstanding checks | |
Bounced checks | |
Uncredited checks | |
Uncollected checks |
_________ Checks that are presented to bank but not yet credited by the bank.
Bounced checks | |
Outstanding checks | |
Uncredited checks | |
Unpresented checks |
Which of the following error results in unadjusted cash book balance?
Unpresented checks | |
Omission of Bank charges | |
Deposit in transit | |
Outstanding checks |
Unpresented checks also referred as____________?
Outstanding checks | |
Bounced checks | |
Uncollected checks | |
Uncredited checks |
Uncollected checks also referred as______________?
Outstanding checks | |
Uncredited checks | |
Bounced checks | |
Unpresented checks |
Standing orders are ________
Credited in the cash book | |
Debited in the cash book | |
Entered in the petty cash balance | |
Entered in the bank statement |
In the Bank reconciliation statement “Deposit in transit” is usually:
Subtracted from bank balance | |
Added to bank balance | |
Subtracted from cash book balance | |
Added to Cash book balance |
Favorable balance of cash book implies that
Credit balance of cash book | |
Debit balance of cash book | |
Adjusted balance of cash book | |
Bank overdraft |
Favorable balance of bank statement implies that
Adjusted balance | |
Debit balance | |
Credit balance | |
Bank overdraft |
Bank sent debit advice of $500 to company being interest on overdraft. It wasn’t entered in cash book. Identify the correct adjustment in cash book.
$1000 will be subtracted | |
$500 will be debited | |
$500 will be credited | |
Non-adjustable |
Bank reconciliation statement is the comparison of a bank statement (sent by bank) with the _________ (prepared by business).
Cash payment journal | |
Financial statements | |
Cash receipt journal | |
Cash book |
Bank reconciliation statement is prepared by____________?
Manager of the business | |
Accountant of the bank | |
Controller of the bank | |
Accountant of the business |
Bank charges amounting to $5000 was not entered in the cash book. Identify the correct adjustment in cash book?
Bank charges will be added to cash book balance | |
Bank charges will be credited in cash book | |
Bank charges will be debited in cash book | |
Bank charges need no adjustment in cash book |
Balance as per cash book(adjusted.=$1000, Unpresented checks=$2000, Uncredited checks=$500, Deposit in transit=$500.
Zero | |
$3,000 | |
$2,000 | |
$2,500 |
A discount of $2000 was given to a supplier on his prompt repayment of debt but the cashier entered the gross amount in cash book.
$2000 will be credited in cash book | |
$4000 will be credited in the cash book | |
$4000 will be debited in cash book | |
$2000 will be debited in cash book |
A company was entered in hire purchase agreement and had to pay $1000 per month.
$2000 will be deducted from cash book balance | |
$3000 will be added to cash book balance | |
$1000 will be added to cash book balance | |
$3000 will be subtracted from cash book balance |
A check returned by bank marked “NSF” means that:
Check can’t be cashed being illegal | |
Check has been forged | |
Bank can’t verify your identity | |
There are not sufficient funds in your account |
A cash deposit made by business appears on the bank statement as _______ balance?
Expenses | |
Debit | |
Credit | |
Liability |
$5000 deposited in bank account was entered twice in the cash book. Identify the correct adjustment in cash book.
$10,000 will be credited | |
$5000 will be debited | |
$10,000 will be debited | |
$5000 will be credited |